Thread: Finances - paying off home or other investments

Hello Men.

I will soon be in the position to pay off my home. I hardly need list the advantages to doing this, but for me personally one big advantage would be being able to go off travelling/doing other shit more or less when I want. As I can work from home fully I could even go and live elsewhere during the British winter, for example.

The major downside in my case is that though I'd be debt free, I'll have zero savings left - all my capital will be in my house, which is a potentially risky position. It leaves me starting again for building up rainy day money and also my 'net worth' could take a big dive if there's a crash (not an issue if I'm here long term but, you know).

The other option is I use the chunk of change for investing in other areas. A second property perhaps, though rentals are not a great bet at this time. Stocks and shares, if I choose wisely. Or just sit on the money, don't try to spend it. Maybe a little bit of it to enjoy life, for example I always wanted to semi-convert a van for trips while I enjoy the outdoors - hiking, cycling, climbing etc. A van also gives me the ability to earn money moving things for people (I currently own only bicycles and a motorcycle).

I guess these things will come down to what each man wants in life, but regardless, I would be interested to hear people's thoughts on what they would do.

Cheers All.

Originally Posted by happybachelor

I'll have zero savings left

Zero is its own risk, too. The word from financial planners (and from me) is always have an emergency fund available if you lose your job or experience other financial catastrophe. They used to say 6 months worth of income then I heard 8 months worth. I don't know how much they are now recommending.

Originally Posted by mgtower

With Covid uncertainty, and .gov bumbling, we're looking down the barrel of 10 years worth of income, excluding hyperinflation! Plus side, there's lots of recipes for crow and possum on the internet!

You're so right! LOL

Greetings Happy Bachelor,

Congratulations of building up your wealth enough to possibly pay off your home. I personally think you could go either way and pay it off or build your savings a bit more and then pay it off later. Each has their pros and cons.

I would caution buying a second property to rent out as that is a lot more work. I don't know how it is where you live but sometimes the laws seem to favor the tenets at the expense of the landlords.

Unboxxed
I would like at £10-£20k saved for a rainy day. Without the mortgage I could easily save £7.5k in the first year. Possibly £10k if I did more weekend work. Having no debts means I could easily get credit in an emergency, or use my credit cards and overdraft which are high limit but unused.

Bonobo
Thank you. Ironically having a rental is what has got me to this position. But with the government purposely crashing the economy, and in particular destroying local economies, private renting seems a bad move at this time. It is hard work and risky, and I'm not sure I can be bothered doing it again.

So true. Rather be the very comfortably off guy in a boring, reliable car, any day of the week. Than attracting hoes and invoices with an expensive dick extension.
Can't go wrong with Japanese anything. Except maybe gynocentrism lol.
At the end of the day it's about comfortable being perceived by most people as a ' nobody', because you're putting yourself and your own rational needs first.

Originally Posted by mgtower

I watch the people around me change cars faster than I wear out a pair of sneakers! Sneakers: $65.00 Automobile: $35,000.00 Which one should we replace more often?

I'm still driving my Camaro that I bought brand new in 1984. That's 37 years next month. Cheaper than a new car payment all the way around.

Funny thing is, old ladies are starting to notice my car and will say things to me when I am entering/exiting it, like "Cool car!".

Oh, so after all of these years, it's now a babe-magnet for the octogenarians? Where the hell was my car back when I thought I needed the attention? LOL.

Knowing what I know now, ha, my car was doing me a favor by keeping them leeches away! What a best friend my car turned out to be!

Regarding mortgages, I sold my first house in a flat market in Phoenix in the 90s, after 13 years I made no money on it, moved to Seattle (a high-cost city for those who don't know) and bought my second house. The price difference was as if I had never bought that first house. Holy crap, prices were high, even then. I was 39 when I bought my Seattle house, and a 30-year mortgage paid on schedule would mean I'd be 69 making that final payment. This assumes that I'd still have my job through my 60s which I doubted, what with my employer's wild swings of boom and bust. I had to think of a plan.

Luckily I was entering a boom period where I could have all the OT that I could eat, and I decided to create a 5-year plan where I worked 11 1/2 hour days, five days a week plus occasional weekends. I had no life, got up at 5am, got home at 8pm, ate, went to bed, did laundry on weekends, etc. No vacations, no cell phone plan, free 56k dial-up internet, clipped coupons, took the bus everywhere. I kept all expenses at a minimum to shovel all money towards retiring that mortgage. I was going to fucking succeed and no one better get in my way!

I did this OT for 4 1/2 years straight, until my dad died. Make a long story short, I retired my mortgage after 13 years, and the bust years were starting to happen. I'm very glad I did my plan. My almost 5 years of no-life is a distant memory now. I retired at age 56, no house payment and, yeah, no car payment.

So, I guess I was right after all, that I would not have a job in my 60s!

Two versions of the financial "Position of Fuck You."

https://www.youtube.com/watch?v=eikbQPldhPY

https://www.youtube.com/watch?v=rJjKP8vYjpQ

For me, the 1990s were a decade adrift on the employment high seas.
The recession of the early 1990s, followed by the downsizing of the military made the the first third real rough.
The middle years were great. Steady work fixed my finances for a while and I paid off my student loan checks with one per diem payment.
The last couple were hell. Being underemployed triggered my ex-wife's hypergamy and ended my marriage.

But, like 1941 did for a lot of Great Depression era men, in 2001, a war came a long and fixed everything. Suddenly, my particular set of skills were in great demand.

I bought a modest house. Paid it off in less than 5 years. Got something twice as good/expensive, right after the housing bubble burst in 2008. Picked up a less-than-one-year-old house for $310k, when it sold a few months earlier for $368k.

Rented the first house. Used those payments to pay for the second house.

Drove an indestructible Japanese car (made in the UK!) for 14 years. Still have an indestructible Korean compact car made in 1993, and it is still a good little 3-season commuter that has lasted me for the last 18 years.

A paid-off house gives you peace of mind. That is part of your "fortress of solitude."

Like stocks, there are only two days that you should care about the price of your house.
The day you buy it and the day you sell it.

It is a store of value. If your government decides to inflate and debase your currency, that just raises the value of your home.

Pay it off, get that monkey off your back, and then start investing with the money you used to devote to the mortgage.

The allies took out Italy, then Germany, then Japan. In that order, but not all at the same time. Why, because that was the order of difficulty.

Now, about an emergency fund.

I believe in having one. However, does it have to be a couple of months' salary in a bank account earning next-to-nothing in interest?

No.

Could it be 2-3 credit cards that you rarely, if ever use, in an envelope marked "for emergency use only," that you keep in the back of a drawer, and have have taped up in strapping tape so if you ever did try to get into the envelope it would remind you that it really needs to be an emergency?

yes.

Could you, if you lost your job and had to go 2, 3, 4 months without a new job, get by with unemployment insurance, a pantry of canned and preserved foods, no mortgage payment, no car payment, and judicious use of cash advances on those emergency credit cards?

Wow that Chevy Camaro has aged like a MGTOW! The irony being yes, it's now a chick magnet!

Fortress of solitude.. I like that. Get your house how you want it, and pay it off, it's something that can't be taken from you. In theory. Free to reduce hours, free to travel, etc.

Some great advice here. I can't get this anywhere else. I am thankful for this site and for the men who keep it running.

That would be one hell of a yard sale! I am slowly reducing my shit too. It's therapeutic. Bought way too many expensive clothes in the past. I mean how fucking pathetic is that! It's funny when you realise a lot of your old shit was purchased due to an extremely blue pilled state of mind. I wish I had a MGTOW father, lol.

Even if you are far away from paying off the house, being ahead on your payments is good, too.

You can have an "emergency fund" of money sitting in the bank....and earning very, very little interest.

Meanwhile, the banks are charging you twice, three, even four and five times the interest for borrowing money from them in mortgage interest.

What if you took some of that emergency fund and paid off 2, 3, or more months of the mortgage ahead of time? And kept it paid in advance from then on in?

Would an emergency or a job lay off be as scary if you knew you were not in danger of losing your home?

-----------

What do we call someone who can't pay their rent after 2-3 months? (Because eviction is a slow process.) Homeless.

What do we call someone who can't pay their mortgage for 4-5 months? (Because foreclosure is an even slower process.) Homeless.

What do we call someone who can't pay their car payments after 2 months? A pedestrian.

What do we call someone who can't pay more than the minimum on their credit card? An American.

Sam, just watched The Gambler.
Fortress of Solitude, Fuck You position.. sound logic.
Good movie!

I liked your idea of investing the remaining finance into buying another property. You are wrong when you say that renting is not relevant right now. Remember that renting flats and houses is always relevant. I buy property in other countries and rent it out to tourists and locals. I do everything legally and pay taxes conscientiously. I use the services of [URL redacted] to avoid financial problems. This way, I am sure of the transparency of the transactions and getting a good profit. So, I recommend that you think more seriously about the idea of real estate investment.

[Mod note: Your first post. And your last, spammer. Also, your choice of username is suspiciously female when your other registration info is not so I don't know what you are up to with that.]

Originally Posted by sam luis obispo

Two versions of the financial "Position of Fuck You."

https://www.youtube.com/watch?v=eikbQPldhPY

https://www.youtube.com/watch?v=rJjKP8vYjpQ

For me, the 1990s were a decade adrift on the employment high seas.
The recession of the early 1990s, followed by the downsizing of the military made the the first third real rough.
The middle years were great. Steady work fixed my finances for a while and I paid off my student loan checks with one per diem payment.
The last couple were hell. Being underemployed triggered my ex-wife's hypergamy and ended my marriage.

But, like 1941 did for a lot of Great Depression era men, in 2001, a war came a long and fixed everything. Suddenly, my particular set of skills were in great demand.

I bought a modest house. Paid it off in less than 5 years. Got something twice as good/expensive, right after the housing bubble burst in 2008. Picked up a less-than-one-year-old house for $310k, when it sold a few months earlier for $368k.

Rented the first house. Used those payments to pay for the second house.

Drove an indestructible Japanese car (made in the UK!) for 14 years. Still have an indestructible Korean compact car made in 1993, and it is still a good little 3-season commuter that has lasted me for the last 18 years.

A paid-off house gives you peace of mind. That is part of your "fortress of solitude."

Like stocks, there are only two days that you should care about the price of your house.
The day you buy it and the day you sell it.

It is a store of value. If your government decides to inflate and debase your currency, that just raises the value of your home.

Pay it off, get that monkey off your back, and then start investing with the money you used to devote to the mortgage.

The allies took out Italy, then Germany, then Japan. In that order, but not all at the same time. Why, because that was the order of difficulty.

Now, about an emergency fund.

I believe in having one. However, does it have to be a couple of months' salary in a bank account earning next-to-nothing in interest?

No.

Could it be 2-3 credit cards that you rarely, if ever use, in an envelope marked "for emergency use only," that you keep in the back of a drawer, and have have taped up in strapping tape so if you ever did try to get into the envelope it would remind you that it really needs to be an emergency?

yes.

Could you, if you lost your job and had to go 2, 3, 4 months without a new job, get by with unemployment insurance, a pantry of canned and preserved foods, no mortgage payment, no car payment, and judicious use of cash advances on those emergency credit cards?

Agree with all except the credit cards.
You're way better off with an emergency fund, at least 3-6 months expenses.
That's how I do it as I've had no credit cards since 2006.

Using credit while unemployed or other emergency means that much more debt to pay.
Kinda like having a wife.

Originally Posted by Unboxxed

I'm still driving my Camaro that I bought brand new in 1984. That's 37 years next month. Cheaper than a new car payment all the way around.

Funny thing is, old ladies are starting to notice my car and will say things to me when I am entering/exiting it, like "Cool car!".

Oh, so after all of these years, it's now a babe-magnet for the octogenarians? Where the hell was my car back when I thought I needed the attention? LOL.

Knowing what I know now, ha, my car was doing me a favor by keeping them leeches away! What a best friend my car turned out to be!

Regarding mortgages, I sold my first house in a flat market in Phoenix in the 90s, after 13 years I made no money on it, moved to Seattle (a high-cost city for those who don't know) and bought my second house. The price difference was as if I had never bought that first house. Holy crap, prices were high, even then. I was 39 when I bought my Seattle house, and a 30-year mortgage paid on schedule would mean I'd be 69 making that final payment. This assumes that I'd still have my job through my 60s which I doubted, what with my employer's wild swings of boom and bust. I had to think of a plan.

Luckily I was entering a boom period where I could have all the OT that I could eat, and I decided to create a 5-year plan where I worked 11 1/2 hour days, five days a week plus occasional weekends. I had no life, got up at 5am, got home at 8pm, ate, went to bed, did laundry on weekends, etc. No vacations, no cell phone plan, free 56k dial-up internet, clipped coupons, took the bus everywhere. I kept all expenses at a minimum to shovel all money towards retiring that mortgage. I was going to fucking succeed and no one better get in my way!

I did this OT for 4 1/2 years straight, until my dad died. Make a long story short, I retired my mortgage after 13 years, and the bust years were starting to happen. I'm very glad I did my plan. My almost 5 years of no-life is a distant memory now. I retired at age 56, no house payment and, yeah, no car payment.

So, I guess I was right after all, that I would not have a job in my 60s!

“where I could have all the OT that I could eat, and I decided to create a 5-year plan where I worked 11 1/2 hour days, five days a week plus occasional weekends. I had no life, got up at 5am, got home at 8pm, ate, went to bed, did laundry on weekends, etc. No vacations, no cell phone plan, free 56k dial-up internet, clipped coupons, took the bus everywhere. I kept all expenses at a minimum to shovel all money towards retiring that mortgage. I was going to fucking succeed and no one better get in my way!”

This ^^^ was my life during the last 7 years of my living in America. I was practically living out of my office, working 15-16 hours a day. Saturdays included. I used to WORK in my sleep that lasted 4-5 hours a night max. No kidding. Just imagine if you can. No going out, no meeting with people, eating $1 McChicken for BRUNCH everyday. Only drinking crappy office coffee. No life whatsoever. Only entertainment was occasional poon on Sundays.

I was making GOOD money and people used to laugh at me for having NO LIFE! My rented one-bedroom apartment ALWAYS looked like a shithole as I hardly cleaned it. Just thought to myself, what for? I eventually lost my deposit on that apartment as it was in that BAD of a shape when I left it. Parents came to visit me a couple times and each time they were disgusted by the life I was living and implored me to leave the job as it was sucking the life out of me. I just shrugged!

What was going in my mind?

Save, save, save so I NEVER have to work again.

I had a dream of not having to work for a living and that I was going to fucking succeed and no one better get in my way!

Here I am, your classical Andy DuFrense, enjoying good whiskey every night, watching the world go by, and asking, “What’s up, biatch?”

A second property perhaps, though rentals are not a great bet at this time. Stocks and shares, if I choose wisely. Or just sit on the money, don't try to spend it. Maybe a little bit of it to enjoy life, for example I always wanted to semi-convert a van for trips while I enjoy the outdoors - hiking, cycling, climbing etc.

Paying off your home is a great achievement, but it's understandable to be concerned about having all your capital tied up in one place. On the other hand, investing in other areas could bring diversity to your portfolio and potential growth. Have you considered talking to a financial advisor? They can help you make informed decisions based on your specific goals and risk tolerance. I found advisor's help useful once when i needed financial advisor for medical professionals at work. Hope it helps you too

If it's your "forever home" consider paying it off. However, make sure you have an emergency fund of 6 month worth of expenses saved up. If you have an Offset Account with your mortgage, consider just putting all your funds in there and if you do need to access it, it just functions as a line of credit.